January 2, 2019 / 8:34 AM / 6 months ago

Private equity firm EQT increases offer for Sweden's Karo Pharma

STOCKHOLM, Jan 2 (Reuters) - Private equity firm EQT on Wednesday bumped up its offer for Swedish specialty pharma group Karo Pharma to 6.15 billion Swedish crowns ($694 million), citing in part stock market performance since its original offer two months ago.

The revised bid made through the EQT VIII fund offers shareholders 38 crowns, representing a premium of 29 percent to the stock’s close on Oct. 26, the last trading day before the original offer of 36.90 crowns per share was made.

Karo Pharma’s shares were up 2.7 percent at 38.5 crowns at 0812 GMT, indicating that shareholders expected the deal to sail through.

Per Franzen, partner at EQT Partners and investment advisor to EQT VIII, said he was positive about Karo Pharma’s worth and the value EQT could bring as owners even at the increased offer.

“We now hope that the remaining shareholders share our perspective that this revised offer is attractive, also considering the stock market development since the initial offer was announced at the end of October 2018”, he said.

Since the original offer was made to the last trading session of 2018, Stockholm’s OMXSPI index had fallen by 3.94 percent and the MSCI Europe index has lost 4.01 percent.

Karo Pharma said in a separate statement that its board unanimously recommended the revised offer.

The original offer had also been recommended by Karo Pharma’s board with Chairman Anders Lonner and board member Per-Anders Johansson, together holding 13.6 percent of shares in the company, having declared they intended to accept the bid.

Lonner suddenly and unexpectedly died in December.

The acceptance period is expected to run until Jan. 17 and requires EQT to take ownership of 90 percent of the shares. ($1 = 8.8623 Swedish crowns) (Reporting by Esha Vaish in Stockholm, editing by Louise Heavens)

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